Indian conglomerate GVK has backed away from earlier comments over the use of foreign workers to construct the $10 billion Alpha Coal Project in Queensland’s Galilee Basin in a joint venture with Gina Rinehart’s Hancock Coal.

GVK and Hancock Coal have won approval from the Queensland government for the Alpha coal project, which is expected to create 3600 jobs during construction.

In February, GVK vice-chairman Sanjay Reddy flagged that GVK was likely to apply to use guest workers on the project amid serious industry-wide skills shortages.

But in an interview with The Australian Financial Review yesterday, Mr Reddy said the use of foreign workers under the federal government’s enterprise migration agreement scheme was not central to the project going ahead.

GVK vice-chairman Sanjay Reddy.
Photo: Eddie Safarik

“We are in the process of negotiating our engineering, procurement and construction [EPC] contracts," he said. “Once we finalise with the EPC contractors then we will decide."

GVK insists the federal government’s EMA has always been a last resort to fill vacancies on the project, which is set to become the largest coal development in the southern hemisphere.

The scheme allows resources projects with capital expenditure of more than $2 billion and a peak workforce of more than 1800 workers to access overseas labour for vacancies.

Mrs Rinehart last week won approval to sponsor up to 1715 workers for the three-year construction phase of Hancock Prospecting’s Roy Hill iron ore project in the Pilbara region of Western Australia.

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The move was welcomed by industry leaders including Australian Mines and Metals Association chief executive
Steve Knott
, Business Council of Australia president
Tony Shepherd
and the chairman of National Australia Bank and Woodside Petroleum,
Michael Chaney
.

However, the decision prompted fierce opposition from union leaders, including Australian Workers Union secretary
Paul Howes
, the Greens, and Katter’s Australian Party founder
Bob Katter
.

Yesterday Mr Katter said EMAs meant that jobs, as well as resource sector profits, were now going overseas. “When
Gina Rinehart
,
Clive Palmer
or the Indians say to us that they can’t find workers in Queensland, there are 299,000 people seeking full-time employment in Queensland that can’t get full-time employment," Mr Katter said.

“These are the plum jobs in this country, almost all of them above $100,000 a year, and they will be given to foreigners and not to Australians."

The Alpha Coal Project is expected to produce 30 million tonnes of exportable thermal coal a year, with first coal expected in 2015.

Hancock Coal owns 21 per cent of the Alpha coalmine, which comprises six separate open-cut pits with a total strike length of 24 kilometres.

Queensland Deputy Premier Jeff Seeney said the development would bring huge economic benefits to the state. “The direct income in royalties to the state and taxes to the federal government will be significant," he said.

Mr Seeney said the government approval cleared the way for GVK to develop a 500 kilometre railway from the project to Abbot Point coal terminal, near Bowen.

The government has already indicated it expects Galilee Basin proponents, including Clive Palmer’s China First Project and India’s Adani Group, to work with GVK on a common rail corridor to coal terminals at Abbot Point.

“Conditions and recommendations in my report will ensure that impacts are well mitigated and managed through environmental management plans, environmental licences, development permits and a social impact management plan," Mr Broe said.